The city of Portland has taken a bold step in addressing the concerns of local restaurants and food delivery workers by capping fees that third-party food delivery services like DoorDash and Grubhub can charge. The unanimous vote by the Portland City Council aims to provide relief to struggling businesses and ensure fair compensation for drivers amid the ongoing pandemic.
In an effort to level the playing field, Portland has joined other cities such as Seattle, Los Angeles, and Philadelphia in imposing a 10% cap on commission fees. New Jersey has also implemented a similar limit of 10% when restaurants use their own drivers, with a higher rate of 20% for app-based deliveries.
The issue of exorbitant fees is not new, with some food delivery companies charging as much as 30%. The new rule aims to put an end to this practice by making it illegal for these companies to decrease payments to delivery workers in order to make up for lost revenue from restaurant fees. Additionally, the ordinance includes a provision that prohibits companies from reducing driver pay due to the fee caps.
The development of this ordinance was a collaborative effort between Commissioner Chloe Eudaly's office, the Portland Independent Restaurant Alliance, and the Asian Pacific American Network of Oregon. The city council approved an amendment to include a 5% limit for delivery services that allow restaurants to transport their own food or enable customers to pick up orders at the business.
Jenny Lee, advocacy director with the Asian Pacific American Network of Oregon, emphasized the importance of this fee cap, stating it would be a "lifeline" for small business owners around the city. She highlighted the struggles faced by businesses in Portland's Jade District, where many Chinese and Vietnamese immigrant communities reside, who are struggling to keep up with rent, food costs, and worker wages amidst the pandemic.
Katy Connors, a member of the Portland Independent Restaurant Alliance, noted that many restaurants have opted out of working with delivery apps due to the unsustainable commission fees. She also pointed out that while local restaurant sales are down, food delivery companies are thriving, citing Uber Eats' increased bookings by over 100% in the second quarter.
Representatives from DoorDash, Grubhub, and Uber Eats opposed the ordinance, arguing that higher fees may be passed onto customers, leading to fewer delivery orders and reduced income for drivers. However, city officials emphasized the need to protect small businesses and ensure fair compensation for workers.
The new rule will remain in place until Portland's state of emergency order lifts, after which it will expire. If companies violate the ordinance, they could face civil penalties of up to $500 per day, per restaurant overcharged.
In conclusion, Portland's decision to cap fees is a crucial step in supporting local businesses and ensuring fair compensation for food delivery workers. As the city continues to navigate the challenges of the pandemic, this measure aims to promote sustainability and equity in the fitness app development industry.